Tuning inventory policy parameters in a small chemical company

Abstract

A project to improve inventory management in a small UK chemical company is described. A research group comprising university academics and company managers for logistics and information technology examined current practices and analysed a database of historical records of business operations of the company. Based on the analysis, a scheme to categorise stock and set ordering policies to optimise inventory costs was developed. Some comments are made on process issues and the learning that took place.

Keywords:

• practice of OR
• inventory control
• forecasting
• small and medium enterprises
• chemicals
• data mining

Acknowledgements

The first author acknowledges the financial support from the National Council for Science and Technology of Mexico. We thank the anonymous chemical company in West Yorkshire (England) for its willingness to strengthen links with the university, sponsoring the work and providing the data. We are also grateful to Dr Gert Goltz from Keyworth Institute for coordinating this collaborative project and for his valuable comments.